Scandal-hit CBI to slash workforce as member exodus hits income

The CBI has warned staff of a wave of job cuts as the scandal-hit UK business lobby group prepares to slash its wage bill by one-third after members quit in droves over allegations of serious sexual misconduct.

The organisation informed employees of the move in an internal meeting on Thursday and will aim to make the cuts through voluntary redundancies first, according to people familiar with the matter.

The announcement came a day after the CBI launched an effort to win back the confidence of members with a “programme of change”, which set out an overhaul of its culture, governance and lobbying activities.

In an extraordinary general meeting on June 6, CBI members, which include many FTSE 100 companies, will vote on whether it retains their confidence.

The group’s future has been thrown into doubt by the scandal sparked by claims reported by the Guardian newspaper of serious misconduct, including two allegations of rape, which prompted a police investigation.

The allegations prompted more than 65 members — including insurer Aviva, NatWest bank and retailer John Lewis — to publicly cancel or pause their membership in April, dealing a blow to the group’s finances. 

Member subscriptions account for £22mn of the CBI’s £25mn in annual revenues, according to its most recent accounts. 

Even if the CBI wins the support of members next week and regains access to ministers, who have halted engagement with the group, it will have to make some of its nearly 300 staff redundant in order to stay afloat. 

Following Thursday’s announcement, first reported by the Guardian, the CBI said: “In light of the recent loss of some of our revenue, the CBI has to take some difficult decisions. We need to reduce our salary cost base by a third among other likely cost saving measures going forward.”

The group — whose board has in recent days received restructuring advice — said it would become “a smaller and refocused organisation”. It added that it believed the “programme of change” provided “a strong basis for our members to continue to back us at our EGM”.

However, the publication of the “prospectus” on Wednesday failed to spark a public show of support from businesses or the government. 

“The CBI hasn’t functioned for months and no one has noticed any difference,” said an executive at one former member. “That’s the danger for them.”